Last Updated: 13 Sep 2024
Executive Summary
MDU Resources Group Inc. (MDU) is a diversified energy and construction materials company with a market capitalization of $5.2 billion. The company operates in two primary segments: regulated power supply and construction materials and services. MDU has a strong financial position with a low payout ratio and a solid track record of dividend growth. The stock is currently trading at a forward P/E ratio of 20.08, which is below the industry average. Analysts have a positive outlook on the stock, with a consensus target price of $26.50.
Company Overview
MDU Resources Group Inc. is headquartered in Bismarck, North Dakota. The company was founded in 1924 and has grown into one of the largest energy and construction materials companies in the United States. MDU's regulated power supply segment provides electricity and natural gas to customers in North Dakota, South Dakota, Wyoming, and Montana. The construction materials and services segment manufactures and distributes concrete, aggregates, and other construction materials.
Fundamental Analysis
MDU's financial performance has been strong in recent years. The company's revenue has grown at a compound annual growth rate (CAGR) of 5.2% over the past five years. Net income has grown at a CAGR of 6.3% over the same period. MDU has a strong balance sheet with a low debt-to-equity ratio of 0.37. The company also has a strong cash flow position, with operating cash flow of $676 million in the past twelve months.
MDU's dividend yield is currently 2.07%. The company has a long history of dividend growth, with the dividend increasing for 16 consecutive years. MDU's payout ratio is currently 30%, which gives the company ample room to continue increasing the dividend in the future.
Technical Analysis
MDU's stock price has been trending higher in recent months. The stock is currently trading above its 50-day and 200-day moving averages. The relative strength index (RSI) is currently at 60, which indicates that the stock is overbought. However, the moving average convergence divergence (MACD) is currently positive, which indicates that the stock is still in a bullish trend.
Short Term Outlook
In the short term, MDU's stock price could continue to trend higher. The company's strong financial performance and positive analyst sentiment are likely to support the stock price. However, the stock is currently overbought, which could lead to a pullback in the near term.
Long Term Outlook
In the long term, MDU's stock price is likely to continue to grow. The company's regulated power supply business provides a stable source of revenue and earnings. The construction materials and services segment is also expected to benefit from the continued growth in the construction industry. MDU's strong financial position and dividend growth potential make the stock a good long-term investment.
Analyst Recommendations
Analysts have a positive outlook on MDU's stock. The consensus target price is $26.50, which represents a potential upside of 4.2% from the current price. Three analysts have a strong buy rating on the stock, while one analyst has a hold rating.
